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As Hundreds of Schools Move Online, Shops in University Towns Could Be In Trouble

College campuses around the U.S. are far quieter than usual this week as hundreds of schools have transitioned to online classes to help combat the spread of the coronavirus.

Closures that started in Washington state and New York, where the earliest clusters of the virus in the U.S. were detected, have expanded throughout the country this week, affecting both public and private colleges.

The growing health crisis, which, as of Thursday, reached 127,863 cases of the virus and 4,718 deaths globally, is also a potential economic one for many communities, including those that rely on the dollars brought in by students, faculty and visitors throughout the school year. Beyond regular classes, there have been widespread cancellations of major events such as sports tournaments, conferences, parades and admissions days as institutions seek to limit large gatherings.

While economists and business leaders have cautioned that it is too soon to know the full impact of the COVID-19 outbreak on consumer spending, most agree that small businesses are particularly vulnerable.

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In Boston, a city that’s home to 30 degree-granting institutions, schools including Boston University, Boston College, Harvard University and Massachusetts Institute of Technology have announced that they will shift to remote learning and, in some cases, will require students that live on campus to return home by the end of the week.

According to a 2016 study, the five-campus University of Massachusetts system was responsible for $6.2 billion in economic activity in Massachusetts in 2019, while Boston University generates nearly $4 billion annually, including about $175 million in spending at Boston vendors.

In Michigan, the state’s three largest higher-education institutions — Michigan State University, the University of Michigan and Wayne State University — generated $18.7 billion in economic activity in 2017, according to an annual study by the Anderson Economic Group. That included $3.96 billion in student spending on categories like groceries, apparel and off-campus meals and entertainment.

“Businesses in college towns will definitely feel the impact as students start heading home to take classes online,” said Megan Holland, vice president, communications and marketing at the Michigan Retailers Association.

She said that the timing of the closures — right before the annual St. Patrick’s Day celebration — will be particularly challenging for local bars and restaurants. “As for retail, right now it is a mixed bag. The stores that have essentials like toilet paper and hand sanitizer are selling out of those products and doing their best to keep up with demand. Stores that have nonessential items are likely to experience a slowdown if people decide to stay at home more.”

In North Carolina, towns like Chapel Hill and Boone rely on the college population to support local businesses. “The direct effect of shifting that consumer group away from college town businesses will be a huge hit to retailers and restaurants that depend on student spending,” said Andy Ellen, NC Retail Merchants Association president and general counsel in a statement. “Hopefully most retailers will survive this latest hurdle, but they won’t be unscathed. When things get back to normal it will be up to consumers to get out and support the retailers that have sponsored the little league teams, given to the booster clubs and generally supported their communities.”

In the past few years, national retailers have also been stepping up their presence in college towns. Target, for instance, has opened around 100 small-format stores, about a quarter of which are on college campuses with inventory that caters specifically to those communities.

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